IAC Focuses On Sites With Lots Of Traffic

World Class

Ask.com, Vimeo.com and Match.com may seem like unrelated websites, but there's one thing they have in common: They're owned by media conglomerate IAC.
New York-based IAC (IACI) owns more than 150 Internet brands in the areas of search and applications, personals, local, media and other. Additional names include About.com, Dictionary.com, Chemistry.com, OkCupid.com, CityGrid.com, HomeAdvisor.com and Tutor.com.
IAC is the seventh-largest site network in the world. Its websites get over 1.1 billion visits and more than 346 million unique visitors per month. The company is headed by longtime entertainment figure Barry Diller.

The IAC building in New York City. IAC/InterActiveCorp. owns many popular Internet websites. AP View Enlarged Image

"What's interesting about the company is that they've historically been referred to as a multibusiness business," said analyst Scott Kessler of S&P Capital IQ. "You don't necessarily know the IAC name or brand, particularly if you're a consumer in the marketplace. But it's a huge number of interesting and compelling Web properties."
The company has been around since the mid-1980s and has gone through various growth spurts, involving many acquisitions and spin-offs. In the early days, its acquisition strategy was pretty aggressive. But that strategy was fraught with risks, says Kessler.
In more recent years, however, management has put less of a focus on M&A and more of a focus on execution.
More Measured
"They've amassed all these kinds of brands and businesses and have operated them very effectively, very efficiently. They've been more measured in some of their strategic decisions from an M&A perspective," added Kessler. "I think they've been pretty shrewd in terms of some of the capital allocation decisions that they've made. And I think, most importantly, perhaps, operationally the company seems to continue to execute on a regular basis."
One way IAC is different from other large Internet companies is that it tends to operate all the businesses autonomously.
Its stock, after hitting a high last October, went through a soft patch, but has been recovering since. The reason for the softness? The market's perception of the impact of changes to Google 's (GOOG)advertising policies on IAC's Ask.com.
"They (Ask.com) weren't one of these bad actors that Google is trying to police up," said Brian Fitzgerald, an analyst at Jefferies & Co. "There were some of these other guys that had to make these changes."
"The Street got a little overly concerned with the Google changes. This company has had a 10-year relationship with Google. That is not a business relationship that is going to go sour overnight."